Staff Writer and Editor AccountingWEB
Share this content

Reactions Varied on Tax Reform Plan

Feb 27th 2014
Staff Writer and Editor AccountingWEB
Share this content

As you might expect, there were plenty of opinions from business groups, corporations, and legislators about the tax reform plan unveiled by House Ways and Means Committee Chairman Dave Camp (R-MI) yesterday. Views ranged from overwhelming support to staunch opposition.

Here’s a roundup of comments made Wednesday by trade associations and industry organizations, companies, and Camp’s fellow lawmakers about his tax reform proposal.

Associations and Organizations
Alliance for Competitive Taxation: “ACT commends Chairman Camp for taking another step today to move comprehensive tax reform forward. Tax reform should create an internationally competitive tax code that promotes US jobs and economic growth, simplifies the code, and helps America compete in the modern, global economy.

“We believe tax reform should build on the best elements of Chairman Camp’s draft, but more work is needed to ensure the final legislation strengthens the competitiveness of all US companies, helping to create economic growth and US jobs that will move our nation forward in today’s global economy.”

American Association of State Highway and Transportation Officials: “We are encouraged by both President Obama's proposed four-year, $302 billion transportation bill and Ways and Means Chairman Dave Camp's proposal to dedicate $126.5 billion to the Highway Trust Fund,” said Executive Director Bud Wright. “We look forward to working with the administration and Congress on a new surface transportation bill.

“The crisis facing the Highway Trust Fund and our national transportation infrastructure is very real. It is good news that the administration and congressional leadership in both houses are looking seriously at strategies to invest in transportation and maintain the solvency of the Highway Trust Fund and the programs it supports.”

American Bankers Association: “The banking industry strongly opposes the bank tax included in Chairman Camp’s tax reform proposal,” President and CEO Frank Keating said. “At a time when policymakers want more loans to be made, this arbitrary bank tax would do precisely the opposite. More than $86 billion a year wouldn’t be available for lending, with a real-world impact that’s far worse.

“This tax will cause investors to turn away from the banking industry, making it harder to meet the stringent capital standards demanded by regulators and dramatically reducing resources that underpin every loan. In fact, since each dollar in capital supports up to $10 in lending, the total impact could be nearly $900 billion in foregone credit over the next decade. Millions of businesses that depend on credit to finance growth and hire workers risk not being funded just as our economy begins to find its way forward.

“We also find it disgraceful that while a new tax is being proposed for banks, today’s proposal ignores a $1 trillion credit union industry that pays no taxes at all, costing the US Treasury $2 billion annually. Credit unions were never intended to be tax-exempt banks, but that’s exactly what they have become. It’s inappropriate for credit unions to continue to freeload on American taxpayers while other financial institutions pay their fair share of taxes – and are now being asked to pay even more. It’s time for this indefensible tax-exempt status to come to an end.”

American Fuel and Petrochemical Manufacturers: “While we understand it is very difficult to develop a tax reform plan and we appreciate Chairman Camp’s efforts, this proposal is not a step toward a pro-growth economic tax policy,” President Charles Drevna said. “The chairman should not consider any tax reform package that makes US manufacturers less competitive. This plan could unintentionally act as a tax increase at a time when American manufacturing is beginning to become globally competitive after decades of losing jobs overseas.

“The extension of depreciation schedules and the repeal of the manufacturing tax deduction in Chairman Camp’s draft will hurt domestic investments. Furthermore, we seriously question retroactively repealing commonly used accounting practices to finance tax reform. Accelerated depreciation, the manufacturing tax deduction, and last-in, first-out (LIFO) are critical deductions that all domestic manufacturers use to help recover costs and replace inventories. Such deductions also ensure American manufacturers remain competitive in a global marketplace. The elimination of these deductions will increase the cost of capital for many US business owners and result in less capital investment and fewer available jobs.

“Although Chairman Camp’s intent was to make the tax code tax simpler and fairer and to level the playing field, he unfortunately missed the mark. To date, the tax reform debate has been fixated on a one-size-fits-all approach of lowering the corporate rate to a certain percentage across the board while eliminating various existing deductions. We urge Congress to take a comprehensive look at how different tax structures impact different sectors of the economy and use such analysis to develop a comprehensive tax reform. A different approach may be needed to advance tax reform for the capital-intensive manufacturing sector than what would be fair for the service sector or web-based businesses. A one-size-fits-all approach to taxing corporate America is not the answer and will result in many industries spending more on taxes and less on salaries – the exact opposite goal Chairman Camp looks to accomplish. We look forward to working with Congress to create a pro-growth tax code that doesn’t pick winners or losers.”

American Petroleum Institute: “Chairman Camp’s ideas show he has put a lot of work into tax reform, but there is a great deal of work left to do. Tax reform is not easy to achieve. As this proposal illustrates, it is even harder to get right,” said President and CEO Jack Gerard.

“An energy and manufacturing renaissance has supported our economy through tough times and created hundreds of thousands of jobs here at home. There are serious flaws in this discussion draft regarding cost recovery and LIFO accounting that could hurt jobs, American energy production, and our energy security.

“America’s oil and natural gas industry already generates $85 million per day for the federal government. Higher taxes on energy and manufacturing would hit American families and workers by undermining private investment, job creation, energy production, and government revenue.

“There are many voices in the tax reform conversation. We will continue to educate lawmakers on the important role tax policy plays in the investment decisions of capital intensive industries like ours.”

Financial Services Forum: “The Forum supports pro-growth, comprehensive tax reform, and we thank Chairman Camp for his efforts on this front. However, in keeping with our support for pro-growth reform, we strongly oppose the new lending tax on financial institutions that is included in the chairman’s proposal,” President and CEO Rob Nichols said. “Such a tax will hurt economic growth and job creation by increasing the cost of capital for American families and business, and undermining US global financial competitiveness. Furthermore, a tax that singles out one specific industry is utterly inconsistent with the fundamental goals of tax reform to lower rates, broaden the base, and remove industry specific treatments.

“We strongly urge policymakers to reject this arbitrary lending tax and instead place their focus on achieving pro-growth tax reform with policies that increase economic growth and expand access to sound lending and credit.”

Independent Community Bankers of America: “ICBA and the nation’s community banks share Chairman Camp’s goals of lower tax rates that incentivize investment and strengthen our economy,” President and CEO Camden R. Fine said. “We look forward to continuing to work with Chairman Camp and others in Congress to provide much-needed tax relief to consumers, small businesses, and the community banks that serve them.”

National Federation of Independent Business: “NFIB has long-advocated tax reform that achieves lower rates and a simpler code,” Vice President of Federal Public Policy Brad Close said. “While we appreciate Chairman Camp pursuing tax reform that lowers some rates, we are very concerned that this plan does not address the core issues that are important to all small businesses: simplifying the code, leveling the playing field for all businesses, and addressing both corporate and individual tax rates. We look forward to working with members of the Ways and Means Committee and Chairman Camp to achieve comprehensive tax reform that does not pick winners and losers based on size and type of business.”

National Retail Federation: “This plan would give our nation the simpler, fairer tax system that we desperately need, but it’s about far more than just tax reform,” President and CEO Matthew Shay said. “This is the foundation for job creation, increased take-home pay, and business growth that would restore the prosperity that has slipped away for far too many American families.

“This is good for the economy, and what’s good for the economy is good for retail. Consumers with money in their pockets buy more, and the products they buy mean even more jobs – not just in stores but in virtually every sector as the ripple effect spreads out. Moves like this – not government-ordered wage hikes and other mandates that erect barriers to job creation – are the way to get America back on track.”

RATE (Reforming America’s Taxes Equitably) Coalition: “Chairman Camp committed to introducing a proposal that simplifies the tax code, broadens the base, and reduces the corporate tax rate to 25 percent,” Co-Chairs Elaine Kamarck and James Pinkerton said. “We congratulate and thank him for delivering on that commitment. We look forward to working closely with Chairman Camp throughout the process on this important issue.

“At a time when unemployment remains too high and growth too slow, the United States needs a simpler, fairer, and more competitive code to spur economic growth and create jobs. The benefits from tax reform done correctly are simply too great for Congress and the administration to ignore. The data from the Joint Committee on Taxation, showing a $3.4 trillion increase in US GDP and nearly two million new American jobs, proves that tax reform is uniquely capable of stimulating growth and employment.

“Chairman Camp’s proposal represents one of the most meaningful advancements for tax reform in nearly thirty years. Lawmakers from both parties have expressed support to simplify the code and reduce America’s world-leading corporate tax rate to an internationally competitive level. It’s time to harness this momentum and enact meaningful tax reform.”

Boeing Co.: “Chairman Camp's draft is an important step toward comprehensive tax reform that will increase economic growth and strengthen US competitiveness. The Boeing Co. has long supported a simplified tax code that lowers the corporate tax rate to a globally competitive level and broadens the tax base. We are pleased to see this process move forward and encourage our elected officials to get behind a bipartisan tax reform effort that grows the economy and creates more jobs in the United States.”

United Parcel Service (UPS) Inc.: “UPS welcomes a process that leads to comprehensive tax reform that will strengthen American businesses and create jobs in the United States,” Chairman and CEO Scott Davis said. “This proposal creates an opportunity for elected officials to work in a bipartisan manner to craft and pass legislation that will make the American tax system simpler, more fair, and put America’s economy on a sustainable path to growth.”

Congressman Kevin Brady (R-TX): “To jump-start the economy, we need a simpler, fairer tax code that protects taxpayers, not special interests, and that helps America compete and win. There is no perfect tax code, but starting today the American people can start putting their power behind fixing this broken tax code and reining in the IRS. We need a tax code that is built for growth – growth of your family, your business, and our economy.”

House Ways and Means Committee Ranking Member Sander Levin (D-MI): “Chairman Camp’s tax reform proposal opens up a discussion that Democrats have wanted to engage in on a bipartisan basis. As Democrats, we believe it is vital that tax reform encourage economic growth, support working families, broaden the middle class, and address income inequality. It must produce a fairer and more adequate tax code for all Americans, ensuring that wealthy individuals and corporations pay their fair share while preserving our long-term economic security in a fiscally responsible way that promotes jobs in the United States. It is through the lens of those priorities that we will review Chairman Camp’s proposal in detail as the committee undertakes a thorough examination of his proposal.”

Congresswoman Nancy Pelosi (D-CA): “The Republican tax proposal must be judged by its impact on the middle class, its consequences for working families, and its effect on our nation’s deficit. Any tax reform plan must grow the economy, encourage job creation, and strengthen the middle class. We will evaluate this Republican plan to see if it meets that standard.

“This Republican measure must be reviewed as part of a broader discussion on action to build an economy that works for everyone.”

Congressman Charles Rangel (D-NY): “As the only member of the House Ways and Means Committee who was on the committee in 1986 [when the tax code was last overhauled], I know how difficult it is to produce a tax reform package that encourages economic growth while supporting working families, broadening the middle class, and addressing income inequality. The Republican tax reform proposal that was released today does not do this.

“During the tax debate of the 1986 Tax Reform Bill, I told then-Secretary Jim Baker that I would support tax reform and help, only if state and local tax deductions were not eliminated. While I will have additional comments after further study of the Republican package, my position has not changed: I will not support a plan that eliminates state and local tax deductions which would have a devastating impact on New Yorkers.”

Congressman Dave Reichert (R-WA): “No one has worked harder to move tax reform forward than Chairman Camp, and I applaud his continued efforts in today releasing a comprehensive tax reform discussion draft. Talking to constituents in my district, it’s clear – families, small businesses, and corporations all agree that our current tax code is unfair, out-of-date, and a strain on family pocketbooks and businesses’ bottom line. The status quo is unacceptable. Comprehensive tax reform will energize the economy by putting more money in the pocket of hardworking Americans and businesses and create more jobs. While there are those who will have concerns with the draft, I look forward to working with all of them as the committee continues its push to make the tax code work for the American people – not the other way around.”

House Budget Committee Chairman Paul Ryan (R-WI): “My friend, Chairman Dave Camp, has put together a bold plan to fix our broken tax code. His plan would get this economy growing and offer much-needed relief to families and workers.

“We don’t have to accept this new normal of slow economic growth. This reform plan will create jobs for Americans across all sectors and boost the wages of workers who feel their economic security slipping away. A simplified tax code will ease the burden on families and businesses that waste too much time, energy, and money trying to navigate a broken code.

“Now is the time for real solutions. No plan is perfect, but the critics must offer an alternative or tell Americans why they continue to defend a nightmarish tax code that works only for the well-connected. Chairman Camp’s plan is a terrific first step toward a much-needed debate over how to best reform the tax code.”

Senator Charles Schumer (D-NY): “Any proposal that eliminates the deduction for state and local taxes, as the Republican plan would do, is dead on arrival.”

Congressman Adrian Smith (R-NE): “Everyone agrees our federal tax code is complicated, outdated, uncompetitive, and too often favors the politically well-connected. By simplifying the code, we can improve compliance, encourage economic growth, and make our tax structure fairer for all Americans.

“This process is not easy, but it is our job to find solutions because the status quo is unacceptable. The draft introduced by the chairman today is a significant step, and I look forward to the discussion and feedback it will generate.”

Congressman Chris Van Hollen (D-MD): “We welcome a discussion on tax reform and are continuing to review the details of Chairman Camp’s plan. While I commend the chairman for offering a comprehensive proposal, we need to thoroughly understand the choices this proposal makes, the consequences those choices have for America’s families, and their impact on our nation’s long-term fiscal health. We look forward to engaging in a serious conversation on all of these issues, and hope the House Republican leadership will do the same.”

Senate Finance Committee Chairman Ron Wyden (D-OR) and Senate Finance Committee Ranking Member Orrin Hatch (R-UT): “The key to robust job creation and more economic opportunity for all Americans is empowering our entrepreneurs, the middle class, and existing businesses to grow and succeed. That means taking a hard look at the real problems that are holding our economy and too many families back. At the top of the list is America’s broken, anticompetitive, and often unfair tax code.

“There’s a reason comprehensive tax reform hasn’t been undertaken since 1986. It isn’t easy, but bipartisan tax reform is desperately needed. Since the last overhaul, when President Reagan worked with a bipartisan group of Senate and House members, America’s economy has changed dramatically. More than 15,000 changes have been made to the tax code. Weighed down by thousands of exclusions, deductions, and credits, our tax system costs individuals and businesses more than $160 billion a year to comply.

“Today, Dave Camp put out a comprehensive vision to remake our tax code. While we look forward to reviewing this proposal, there can be no doubt that Mr. Camp deserves credit for working hard on these vital issues. We look forward to working with members in both chambers and on both sides of the aisle to move the conversation forward.”

Related article:

Here it is ... Dave Camp's Tax Reform Discussion Draft


Replies (0)

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.